States Chief's pension pot doubled in 5 years

Wednesday 23 November 2016

States' accounts show that the pension pot of the Island's senior civil servant more than doubled in five years, between 2010 and 2015.

Last week Express revealed that John Richardson's pension stood at £2.57million in terms of its cash value at the end of last year - but the States' accounts for 2010 show the sum at that time was 'just' £995,000. So since then, it has increased by 2.5 times.

It's believed the huge increase is because of the way the States' pension scheme worked, with the total amount being calculated from the employee's salary in the year they retire, rather than an average of their annual pay while working. That system has now been changed. 

Mr Richardson's salary last year was between £205-210,000 a year, and he became Chief Executive in 2012.

To put the scale of that pension pot into context, a local pensions expert contacted by Express, calculated that for someone in the private sector to achieve a £2.57m pension, they would need to start saving on their 20^th birthday, and do so for 45 years, to the tune of £3,936 per month, which equates to £47,232 a year. Our expert was assuming 5% investment growth and inflation over the 45 years of 2.5% per annum.

Speaking last week, Treasury Minister, Senator Alan Maclean said pension rules have now changed as the previous system was "unsustainable":

"We have moved from the original system - which most corporations and local Governments used - which was a final salary pension, to a career average. The timetable has been set to do that and it has been agreed in the States. That's a step in the right direction. There will be a cap in the liabilities because if we had carried on with the current system it would have been totally unsustainable. We have now get ourselves into a better position than we were, with the career average structure. It is better now than it was.

"We have recognised the problems we had and Jersey was slow in moving to address the final salary system. It was dropped by others some time ago. We have been slow getting there but we now have a system which has been approved and is fairer, although obviously we cannot make this change retrospectively.

"Everybody who now becomes a States employee, goes into the new system."

The accounts also show that Health and Social Services Chief Officer Julie Garbutt had £1.66million in her States pension pot at the end of last year. Other pension pots which hit over the million mark by the end of 2015 include (titles are for 2015): Michael Wilkins £1.7m (Judicial Greffier and Viscount), Paul Matthews £1.69m (Judicial Greffier), Brian Heath £1.19m (Chief Probation Officer) and Mike De La Haye £1.31m (Greffier of the States).